Rates must increase by 35 per cent to balance the fund by 2014
Employment insurance premiums will have to increase substantially over the next three years to balance the EI reserve fund, according to a report from the Parliamentary Budget Officer.
The study from Canada's budgetary watchdog projects EI premium rates for employees will increase every year by the maximum allowable amount, 15 cents per $100 of insurable earnings, starting in 2011 to reach $2.33 per $100 of insurable earnings by 2014.
The current rate, frozen in 2009 and 2010 as an economic stimulus measure, is $1.73 per $100.
This 35-per-cent increase will raise the annual contribution per worker by an average of $535 ($223 paid by the employee and $312 paid by the employer).
Despite the rate increases, the report projects the Canada Employment Insurance Financing Board (CEIFB) reserve will be in the red through the end of 2014.
The deficit will peak at $10.7 billion in 2011 before falling to $0.7 billion by 2014, stated the report.